Archive for the ‘CAW’ Category

Show Me The Money!

May 15th, 2007
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Daimler Chrysler has thrown off the Chrysler moniker, selling off it’s American arm to Cerberus Capital Management. (What will they call the new company, Cerberus-Dodge?)

What’s been fun the past few months, is listening to analysts, and unionists, saying that whoever buys Chrysler will need the blessing of the unions. Talk about letting Buzz control the buzz. But it was always a ridiculous argument, that somehow the union controlled the destiny of the company. And thus it has been proven, as Magna selling out it’s own workers wasn’t enough to get it the company:

The offer by Cerberus Capital Management for the Chrysler Group is far superior to other bids including one from Canadian corporate titans Magna International Inc. and Onex Corp., industry sources say.

Chrysler’s German parent, DaimlerChrysler Group, announced yesterday that Cerberus, one of the largest private equity firms in the world, is taking an 81 per cent stake of the auto maker’s North American operations and its related financial services business for $7.4 billion (U.S.).

“It was substantially higher than the others,” said one official familiar with the bids.

Under its offer, Cerberus will also assume Chrysler’s long-term liabilities for pension and health-care benefits.

One analyst indicated recently that Magna-Onex was a leading contender and would value Chrysler at about $5 billion, excluding Chrysler Financial.

Billionaire Kirk Kerkorian’s Tracinda Corp. publicly bid $4.5 billion in cash but industry watchers said DaimlerChrysler was seeking an offer in the $8 billion to $9 billion range. Other equity funds including Blackstone Group in the U.S. also showed interest in Chrysler.

So it was about the money, not who could get along with the unions? Really? After Daimler spent all those years playing nice with it’s workers, now the CAW is surprised it wasn’t consulted on a $7B deal?

On the eve of what could be an important day in Chrysler’s history, the Canadian Auto Workers’ union was disappointed Sunday it had yet to hear from Cerberus Capital Management LP, which recently emerged as the likely winning bidder to buy Chrysler Group from DaimlerChrysler AG.

The New York-based private-equity firm has not approached the CAW, said Local 444 President Ken Lewenza, expressing his disappointment over reports that Chrysler’s fate could be sealed today.

“(Cerberus) has never, ever talked to the CAW,” Lewenza said. “All I know is what I’ve seen and heard in the media, but I would be very disappointed if an equity firm came in and took over.”

The United Auto Workers union in the U.S. and CAW have objected to Chrysler’s sale to a private-equity firm, saying they fear such a buyer would try to return the company to profit by wringing savings from labour.

“Whoever buys Chrysler is going to have to respect our collective bargaining agreement,” CAW president Buzz Hargrove said.

UAW spokesman Roger Kerson couldn’t be reached for comment.

Lewenza said he was not surprised by Cerberus’ sudden move into the spotlight.

“By hiring (former Chrysler Chief Operating Officer) Wolfgang Bernhard, they put themselves on the map and got people’s attention,” he said. “The focus on Magna was mostly because (CEO) Frank Stronach made his bid public.”

Hargrove said Bernhard has a strong personal relationship with DaimlerChrysler Chief Executive Officer Dieter Zetsche.

“From DaimlerChrysler’s standpoint, it’s purely about who could put the most cash in their pockets the fastest,” said Dan Luria, an analyst for the Michigan Manufacturing Technology Institute in Plymouth, Mich. “Cerberus clearly has deep pockets.”

Note this bad habit Buzz has: he bad mouths the guy with power. He spent an election saying anyone but Harper. When Harper wins, of course, he’s shocked and surprised to find himself on the outside. They did the same thing with Mike Harris. Now, the ink isn’t dry on the sale, and Buzz is bad mouthing a) the new company and b) the new guy in charge. So here’s a prediction. Sometime in the next year, Buzz will be publicly complaining about how the new owners are not respecting/not listening to/not concerned about the CAW and the workers.

And then he’ll wonder why.

CAW, I Love My Job, Wasted Away Again in Buzzistan

CAW and Currency Rates

May 11th, 2007

Today, the CAW is calling on all members to “bring public awareness of manufacturing job losses.” They are marching in Kitchener, Ingersall and Oakville. The latter group will bus themselves to a Scarborough Town Centre and march to the Collins and Aikmen plant scheduled to close in July.

One of the CAWs bugaboos is the high Canadian dollar, which they claim is driving out exporters. I would argue their problem is the opposite, the low dollar of the Cretien era. While exporters and the unions loved the low dollar, and claimed it was driving growth through the 90’s, it was really driving the present manufacturing contraction.

Money’s value is determined, like any commodity, through supply and demand. If demand goes up for money, the price of it rises. Demand goes down, supply increases and price goes down. If you go to Florida, before leaving you go to the bank and convert some Canadian money to American money. You have added to the supply of Canadian funds and to the demand for American funds, thus lowering the value of the Canadian dollar vs. the American dollar. Now your $2,000 is insignificant, (remember the Bank of Canada trying to stave of dramatic decreases – and failing – by selling $50M US?), but what if you are a manufacturer?

Manufacturing plants spend hundreds of millions investing in their plants. They do a cost benefit analysis for a project and, if they see a future in a given location, they upgrade/improve/invest in their plant. In the 90’s everybody was building like mad, but not investing. Canada’s manufacturing facilities have fallen behind the rest of the world. Changes to manufacturing have been drastic the last 20 years, and manufacturers have not been investing in Canada. The result: loss of jobs now.

So to Buzz and the CAW. Before you blame the strong currency on your woes, understand that the low currency you so love is the long term root cause for the present problem.

CAW, Economic Fundamentalism, Wasted Away Again in Buzzistan

Unions for Magna Workers: Consessions For Chrysler Workers.

May 9th, 2007
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Quick question. If traditionally union-bashing Magna is buying Chrysler, and negotiating with the CAW to unionize Magna’s 30,000 workers, what is the CAW giving up in return?

Frank Stronach’s recent overtures to let North America’s auto unions organize Magna International Inc. may lead to a high-stakes swap whereby the unions agree to co-operate in Magna’s potential takeover of Chrysler Group in exchange for a much-needed boost to their membership.

Mr. Stronach, Magna’s founder and controlling shareholder, began discussions several months ago with leaders from the Canadian Auto Workers and the United Auto Workers unions on a new work arrangement for Magna’s North American employees that would involve unionizing Magna’s plants. He has said the current labourmanagement model in the auto industry is broken.

Magna’s recent efforts toward reconciliation with the labour unions may be the first step in what could be a lasting partnership, should Magna take a stake in Chrysler,” Fadi Chamoun, an analyst at UBS Investment Research, said in a new research report. While Magna is looking for flexibility from the unions on work terms, the unions see the potential for adding 30,000 Magna workers to their ranks. “It is this potential that is influencing the unions to favour Magna as an acquirer of Chrysler,” Mr. Chamoun wrote. “Inevitable concessions may be exchanged with a possibility to organize Magna’s non-unionized plants.

Isn’t this collusion? Is Buzz selling out Chrysler workers to gain unionization of Magna? Sure sounds like it. At least, this would be what in the real world of governance laws and conflict of interest guidelines, very questionable. But in the world of Canadian labour law, just another day. Question, what if those Magna workers don’t want to be unionized?

Oh, and where is the NCC on this? Workers rights were once one of their signature issues.

Update: I e-mailed Gerry Nicholls about this post, and in the process made a few more points. Here’s part of what I wrote:

I can’t think of another area in life where it would be OK for a middle party like the CAW to be negotiating two different, and so conflicting deals. Magna workers look like their about to get screwed – unionization whether they want it or not – and us Chrysler workers are going to be asked to take concessions from the same guy who’s handing his workforce over to the CAW. Martha Stewart went to jail for less.

CAW, freedom for the individual is the only truly progressive policy, I Love My Job, Wasted Away Again in Buzzistan